MGM MIRAGE gains settlement for Bellagio outage

Monday, Aug. 9, 2004 | 10:41 a.m.

MGM MIRAGE said today it expects to receive, at minimum, a $6 million insurance settlement in the second quarter related to the power outage that shut down the company's Bellagio resort for more than three days.

That is a minimum settlement from insurers, which may make future payments to MGM MIRAGE, the company said in a quarterly report with the Securities and Exchange Commission.

The company didn't disclose the total amount of losses incurred in the power outage.

MGM MIRAGE also reported a gain of $1.1 million related to the sale or disposal of equipment that was damaged in the power outage, the filing said.

As of today, the company hasn't yet received the results of an independent analysis of the power outage it commissioned after the incident. Company officials say they still don't know the exact cause of the outage, which happened when some main power cables feeding the resort failed suddenly.

The results of an inspection by county building officials revealed that the outage was caused by the degradation of material used to connect power cables running alongside the resort. County officials say they don't know why the material degraded, though they don't believe it was related to an overt defect or human tampering.